GST – AAR Chhattisgarh: GST on the construction of rail infrastructure facilities if are 'Works Contract' as per Section 2(119), shall be chargeable @ 12%, else it would chargeable @ 18% [Order attached]
- The Applicant, M/S Triveni Engicons Private Limited is a private incorporation involved in works contract services. A work has been awarded by M/s Rites Limited, which is a Public Sector Undertaking owned by the Ministry of Railways, Government of India (covered under Section 2(31) of the Railways Act, 1989) for and on behalf of South Eastern Coalfields Limited, (SECL), Gevrahas.
- Whether the rate of GST for the construction of rail infrastructure facilities will be under 3 (v) (a) No. OR Sl. No.3 (xii) Notification No 11/2017-CT(Rate) dated 28/06/2017 as amended?
- The AAR held that the instant supply of the applicant gets aptly covered under SAC 9954 in general and more specifically under 995421. There exist all reasonable grounds to hold that natural bundle of supply of goods and services are present and are supplied in conjunction with each other in the ordinary course of business. The supply thereof is construed to be made when the entire supply is made. Thus, the supply qualifies to be a '"composite supply".
- On the basis of records furnished before us and available on record, is not in a position to conclusively hold that the works, as is forthcoming form the "letter of acceptance" dated 25.10.2021 issued by RITES LIMITED supra, undertaken by the applicant qualifies for being treated as 'Works Contract' as per Section 2 (119) of CGST Act, 2017.
- As the proposed work involves the works related to railway network, the same can be said to be pertaining to Railways. Thus it is appropriate to conclude that the benefit of the entry at Sl.no. 3(v)(a) would be eligible to the applicant, subject to the fact that the works undertaken by them are 'Works Contract' as per Section 2(119) of the Act and if so the applicable GST would be @ 1 2% effective from 25.01.2018.
- In other cases for the said work the rate of tax would be 18% [CGST @9% + CGGST @9%] as stipulated under SI. No.3 (xii) of Notification No /201 7-CT (Rate) dated 28.06.2017